Graham designated TE by arbitrator

the-commish · 07-04-2014, 07:33 PM

Originally Posted by B_Dub_Saint

That was great. You should do my taxes bro. I might be a rich man

Im still puzzled how the cap really works and the loop holes to get through them.

It's not loopholes. The signing bonus is pro-rated over the term of the contract. For instance, a $24 million signing bonus over a 6-year contract comes out to $4 million per year. To that is added each year's salary, plus any incentives, to come up with that season's cap hit. For instance, in Graham's case (we don't know any actual numbers yet except for the $7.053 million franchise tag for this season, which counts against the Saints' salary cap). So if Graham get $24 million in signing bonus, and a $2 million dollar salary for 2014, that adds up to $6 million against the cap for 2014 (if no incentives). In that case, the Saints would gain $1.053 million in this season's cap (the difference between the $7.053 million franchise tag and the $6 million pro-rated bonus + 2014 salary.

The signing bonus portion is guaranteed. If that player were to be waived before the end of the contract, the remaining portion of the pro-rated signing bonus would count against the salary cap... which is then "dead money." In some cases the cap hit can be spread over two seasons (I don't know the exact details of how this is done). Perhaps someone can post to this subject.

vtiger72 · 07-04-2014, 07:48 PM

Originally Posted by the-commish

It's not loopholes. The signing bonus is pro-rated over the term of the contract. For instance, a $24 million signing bonus over a 6-year contract comes out to $4 million per year. To that is added each year's salary, plus any incentives, to come up with that season's cap hit. For instance, in Graham's case (we don't know any actual numbers yet except for the $7.053 million franchise tag for this season, which counts against the Saints' salary cap). So if Graham get $24 million in signing bonus, and a $2 million dollar salary for 2014, that adds up to $6 million against the cap for 2014 (if no incentives). In that case, the Saints would gain $1.053 million in this season's cap (the difference between the $7.053 million franchise tag and the $6 million pro-rated bonus + 2014 salary.

The signing bonus portion is guaranteed. If that player were to be waived before the end of the contract, the remaining portion of the pro-rated signing bonus would count against the salary cap... which is then "dead money." In some cases the cap hit can be spread over two seasons (I don't know the exact details of how this is done). Perhaps someone can post to this subject.

If a player is cut, all guaranteed money (remaining pro-rated portion of signing bonus and any other salaries that were guaranteed) counts against that year's cap. However, a player can be designated a June 1 cut which means that the cap hit is spread over the current year and the following year, however the savings cannot be used until after June 1.

07-04-2014, 07:33 PM	#1
the-commish Longtime WhoDat Join Date: Dec 2009 Location: Henderson, NV Posts: 529	Re: Graham designated TE by arbitrator Originally Posted by B_Dub_Saint That was great. You should do my taxes bro. I might be a rich man Im still puzzled how the cap really works and the loop holes to get through them. It's not loopholes. The signing bonus is pro-rated over the term of the contract. For instance, a $24 million signing bonus over a 6-year contract comes out to $4 million per year. To that is added each year's salary, plus any incentives, to come up with that season's cap hit. For instance, in Graham's case (we don't know any actual numbers yet except for the $7.053 million franchise tag for this season, which counts against the Saints' salary cap). So if Graham get $24 million in signing bonus, and a $2 million dollar salary for 2014, that adds up to $6 million against the cap for 2014 (if no incentives). In that case, the Saints would gain $1.053 million in this season's cap (the difference between the $7.053 million franchise tag and the $6 million pro-rated bonus + 2014 salary. The signing bonus portion is guaranteed. If that player were to be waived before the end of the contract, the remaining portion of the pro-rated signing bonus would count against the salary cap... which is then "dead money." In some cases the cap hit can be spread over two seasons (I don't know the exact details of how this is done). Perhaps someone can post to this subject. SaintFanInATLHELL and hagan714 like this.

07-04-2014, 07:48 PM	#2
vtiger72 100th Post Join Date: Mar 2012 Posts: 185	Re: Graham designated TE by arbitrator Originally Posted by the-commish It's not loopholes. The signing bonus is pro-rated over the term of the contract. For instance, a $24 million signing bonus over a 6-year contract comes out to $4 million per year. To that is added each year's salary, plus any incentives, to come up with that season's cap hit. For instance, in Graham's case (we don't know any actual numbers yet except for the $7.053 million franchise tag for this season, which counts against the Saints' salary cap). So if Graham get $24 million in signing bonus, and a $2 million dollar salary for 2014, that adds up to $6 million against the cap for 2014 (if no incentives). In that case, the Saints would gain $1.053 million in this season's cap (the difference between the $7.053 million franchise tag and the $6 million pro-rated bonus + 2014 salary. The signing bonus portion is guaranteed. If that player were to be waived before the end of the contract, the remaining portion of the pro-rated signing bonus would count against the salary cap... which is then "dead money." In some cases the cap hit can be spread over two seasons (I don't know the exact details of how this is done). Perhaps someone can post to this subject. If a player is cut, all guaranteed money (remaining pro-rated portion of signing bonus and any other salaries that were guaranteed) counts against that year's cap. However, a player can be designated a June 1 cut which means that the cap hit is spread over the current year and the following year, however the savings cannot be used until after June 1.
vtiger72 100th Post Join Date: Mar 2012 Posts: 185

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